Buyers walked away from the fall market faster than closings suggest. Newly pending home sales fell 8.5% from a year earlier in September, while closed sales of existing homes fell 2.5%, according to the Zillow September Market Report, released Oct. 6. Pending sales are the leading indicator in that pair, and they dropped 11.2% from August alone.
The month ended with the 30-year mortgage rate at 7.28%, which Zillow noted was the highest reading since November 2023, citing Freddie Mac. RealtyWire covered that jump to 7.28% when Freddie Mac reported it as the largest one-week increase since 2022.
Payments are rising while values are not
Rates, not prices, are doing the damage. The typical U.S. home value was $366,913 in September, up just 1% over the year, and the Zillow Home Value Index actually fell 0.5% from August. The monthly mortgage payment on that typical home was $1,922, assuming a 20% down payment and excluding taxes and insurance β 6.7% higher than a year earlier.
The affordability arithmetic moved with it. A household earning the median income would need 34.3% of that income to cover the typical monthly mortgage payment, including estimates for taxes, maintenance and insurance, Zillow said. That is up from 33.9% in August and 33.7% a year ago. The comparable figure for renting was 26.3%, flat from August and a shade below the 26.4% of a year earlier.
More listings, fewer sales
Supply is no longer the constraint. There were 1.39 million homes for sale nationwide in September, 2.5% more than a year earlier β the 34th consecutive month of annual gains β though inventory slipped 1.5% from August as the season turned. New listings totaled 343,311, up 0.4% year over year but 11.9% below the pre-pandemic baseline, and down 3.9% from August.
Zillow’s preliminary nowcast counted 319,346 homes sold in September, 2.5% below last year and 5.6% below August; those figures are revised mid-month. Homes that did sell took longer: a median of 29 days to go pending, two days longer than both August and September 2025. Sellers cut prices on 27.4% of listings, up from 26.3% in August and 26.2% a year earlier. In August, the most recent month with the data, 27.6% of homes sold above list price β slightly more than the 26.9% of a year earlier, but well off July’s 29.6%.
The inventory picture is not uniform. Seattle ended September with 20.3% more homes listed than a year earlier, Minneapolis 16.8% more, Cleveland 16.6% more, Louisville, Ky., 16% more, Buffalo, N.Y., 15.2% more and Boston 15% more. Miami went the other way, down 13.9%, with Jacksonville, Fla., down 12.4% and San Francisco down 12.3%.
Where sales fell hardest
Among the largest metros, Atlanta saw the steepest annual drop in Zillow’s sales nowcast at 11.2%, followed by San Diego and Providence, R.I., at 9.3% each, Washington, D.C., at 8.8%, Seattle at 8.7% and Denver at 8.1%. A handful of markets still grew: Oklahoma City was up 7.5%, Louisville 7.2%, Buffalo, N.Y., 6.3% and Orlando, Fla., 5.9%.
Home values split along similar lines. Austin, Texas, was down 3.9% from a year earlier, Las Vegas 2.7% and Seattle 2.2%, while Chicago was up 5.1%, Hartford, Conn., 5%, Milwaukee 4.9% and New York 4.8%.
Rents are picking up what the for-sale market dropped
The more striking number in the report is on the rental side. The typical U.S. rent reached $1,932 in September, up 2.7% year over year β the biggest annual gain since April 2025, according to the Zillow Observed Rent Index. Zillow said annual rent growth has accelerated every month since April and is broad-based, rising for both multifamily and single-family homes.
Landlords are still discounting, though. Concessions appeared in 39.6% of rental listings on Zillow in September, up from 39.3% in August and 37.4% a year earlier β a reminder that headline rent growth and the rent a tenant actually pays can diverge, as our look at how concessions work in this market described.
Rent gains are concentrated in expensive coastal markets. San Francisco rents rose 11.8% year over year, the largest annual gain among the metros Zillow listed, and 1.2% in September alone; San Jose, Calif., was up 8.3% and Virginia Beach, Va., 7.1%. Denver was flat and San Antonio fell 0.7%.
Zillow’s chief economist, Mischa Fisher, tied the two markets together. “The for-sale market’s slowdown was predictable given where mortgage rates currently stand, but the continued strength in the rental market is more surprising. Buyers on the margins are finding the monthly savings for renting too good to pass up, even if their long-run goal is still to purchase a home,” Fisher said. “We expect sales to remain lower than last year through the fourth quarter. However, it’s not out of the question that rates will decline as rapidly as they rose, which would bring both buyers and sellers back to the market. At this point in the calendar, the question is whether they would sit out until next spring.”
The listings data support the first half of that: inventory has been building for nearly three years, and new listings hit their highest level since 2022 earlier this year without translating into sales. What the September figures add is the rental consequence β the month that pending sales fell 8.5% was also the month rent growth ran fastest in well over a year.
Zillow said its October market report is expected on Nov. 5.
